CESA calls on Government for decisive Leadership to revitalise SOEs

Posted On Monday, 26 February 2018 15:34 Published by
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Consulting Engineers South Africa (CESA) welcomes Finance Minister Malusi Gigaba’s comments during the 2018 Budget Speech that “we must act with urgency to make tangible progress on issues of public governance, inclusive growth and economic transformation.”

Chris-Campbell

CESA is calling on Government to show decisive leadership aimed at unlocking the project stream and revitalising State Owned Enterprises (SOEs). CESA also welcomes the renewed focus on the National Development Plan (NDP) as key to growing the economy of the country.

During his delivery of the Budget speech, Gigaba said that business and consumers have responded positively to political developments over the last three months, and are anticipating progressive, ethical and decisive leadership from government.

“Our member firms mostly depend on Government and in particular, SOEs being functional and in continuous pursuit of competent and professional Consulting Engineering services for the development of infrastructure in order to sustain their business operations and maintain a steady workforce of professional practitioners,” declares CESA CEO Chris Campbell.

He adds that South Africa is in dire need of decisive, action based leadership to unlock the project streams and revitalise our SOEs by addressing governance concerns and restoring the confidence of stakeholders by improving their performance and sustainability.

Gigaba stated that the past year was characterised by slow economic growth, recession, ratings downgrades, and heightened concerns regarding the governance and sustainability of key state-owned companies.

“Over the medium term, the growth outlook is higher than projected in last year’s MTBPS. The cyclical recovery is matched by a renewed sense of optimism that the government can and will do its work effectively. This presents an opportunity for us to do the things required to reignite growth and chart a course towards meeting the objectives of the NDP and fulfilling our constitutional obligations. By harnessing these opportunities, we can move our economy towards the targets we have set ourselves in the NDP.”

CESA welcomes the renewed focus on the NDP and has for years been calling on government to accelerate its implementation as it is key to growing the economy of the country and addressing the three triple challenges of unemployment, poverty and inequality.

Government through the NDP has identified infrastructure development as key to the socio-economic development of the country and CESA decries the fact that the budget has constrained the very investment required to reap the benefits that should be derived from such investment. Furthermore, whilst there is more support for supporting students through the tertiary education process, further constrained in frastructure development investment already has led to the consequence of downsizing in the construction sector with increasing unemployment.

Protracted constraints such as these are not conducive then to absorbing these graduates once they complete their programmes and we need to correct this asynchronous cycle with more consultative planning in mind. The NDP should remove the “feast and famine” cycle that has plagued the construction sector for far too long.  

Gigaba bemoaned the weaknesses in project preparation, execution and delivery, which have resulted in lengthy delays and cost overruns and has subsequently established a Budget Facility for Infrastructure, to standardize and improve the management of public infrastructure projects.

Campbell adds that CESA welcomes this Budget Facility but believes that more emphasis should be placed on embedding the Standard for Infrastructure Procurement and Delivery Management (SIPDM), launched by National Treasury in 2016 which sought to maximize the value for money that could be derived from this new Standard.

We need to take a holistic view on our infrastructure investment approach with more life cycle costs in mind. On average South Africa has spent 6% of our GDP on Infrastructure over the last 16 years. This loosely translates to around R300bn each year. The fact that there is no Infrastructure Directorate at National Treasury to take ownership and accountability for the infrastructure investment, as well as no specific Infrastructure specialists within the Auditor General’s office explains why we probably have not realized the “most bang for our buck”. 

This failure to act should now be escalated to more senior decision makers in Government,” he concludes.

Last modified on Wednesday, 28 February 2018 09:19

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